High Net Worth Individuals
Malta Tax Residence
A new scheme was officially launched by Malta’s Ministry of Finance in September 2011 aiming to attract High Net Worth individuals (HNWI) to take up residence in Malta.
Eligible Individuals
Individuals eligible to apply for the special tax status in terms of the HNWI regulations can be:
- EU nationals (excluding nationals of Malta);
- Nationals of Iceland, Norway and Liechtenstein;
- Nationals of Switzerland;
- Any individual who is not a citizen of the EU.
Eligibility Conditions
Eligible HNWI shall be required to acquire qualifying immovable property in Malta which shall represent the applicant’s (and his family) principal place of residence:
- Either on outright purchase which property must have a value of not less that €400,000, or
- Rents a property for not less than €20,000 per annum.
Eligible individuals shall also be required to be in possession of appropriate health insurance and will be subject to a rigorous fit and proper test.
Application Process
The application for special tax status under the HNWI rules may only be submitted to the Malta Commissioner of Inland Revenue through the services of a person that qualifies as an Authorised Registered Mandatory.
A non-refundable fee of €6,000 shall be paid for every application submitted.
Once processed and approved the individual will be able to benefit from the special tax status which approval will be served to the Authorised Registered Mandatory in writing.
On-going Conditions
Once an application is processed and accepted the permit holder shall be required to:
- Reside in Malta for a minimum of 90 days per annum and not stay in any other jurisdiction for more than 183 days;
- Pay a minimum tax amount of €20,000 (plus €2,500 per dependent) per annum in Malta;
- The minimum annual tax payable in the case of non-EU/EEA/Swiss nationals shall be of €25,000 (plus €5.000 per dependent)
Tax and Taxable Income
Taxation applicable to approved individuals shall be computed as follows:
Any income that is received in Malta from foreign sources shall be taxed at the rate of 15%, subject to:
- A minimum Malta tax payable of €20,000, plus €2,500 per dependent;
- A minimum Malta tax payable in the case of non-EU/EEA/Swiss nationals of €25,000 plus €5.000 per dependent.
Approved individuals retain the right to request claims for relief of double taxation up to the limits of the applicable minimum tax payable.
All other income generated in Malta shall be taxed at the rate of 35%.
The separate tax computation regulations shall not apply to individuals and their spouses under this tax status.
Annual Tax Return
An individual who benefits from this special tax status must submit the Annual Tax Return which shall also include information, documents, certifications and declarations confirming that the conditions required to retain the special tax status are met on an on-going basis.
Withdrawal of Special Tax Status
Any changes in the status of an approved individual shall be communicated to the Malta Inland Revenue Department as soon as these occur by through the services of the Authorised Registered Mandatory.
An NHWI will cease to process special tax status with immediate effect, if she/he is in breach of any provisions of the Malta Income Tax Acts.
Disclaimer
The above are points intended to solely serve as an indication of the benefits and regulations available under the HNWI regulations and shall not be considered as final tax advice. Our office has the license to act as an Authorized Registered Mandatory. Should you require any professional advice or further clarifications from our office kindly contact us: www.ecovis.com/malta
